Watercare Welcomes Findings On Economic Performance

Watercare has welcomed the findings of an independent determination of its performance by the Water Industry Commission for Scotland (WICS) which was presented to Auckland Council today (November 4).

The determination said Watercare was the clear leader in economic performance in New Zealand, but it could deliver greater gains if it was able to invest more in renewals and resilience.

“Watercare asked WICS to undertake this work to identify new opportunities and test how we perform against global best practice,” Marlon Bridge, Watercare’s acting chief executive said.

“We welcome this confirmation of our performance and the insight the it offers into how we can deliver greater value to Aucklanders.”

The review found Watercare had achieved much in its first ten years with it delivering reliable services and a comprehensive capital works programme while charging its customers $100 million less per year than was forecast by previous councils.

Watercare’s unit costs compared very favourably with other parts of New Zealand. Other metropolitan areas report unit operating costs that are 50% to 100% higher than ours.

But these were still higher than those of leading UK providers who had been able to undertake a much higher level of investment through greater access to borrowing.

The WICS determination represents the first independent examination of a water provider in New Zealand by an external economic regulator.

Alan Sutherland, who led the WICS determination, said allowing Scottish Water, which is owned by the Scottish Parliament, to invest more had been critical in kick-starting a huge leap forward in performance.

The WICS analysis suggested that Watercare:

• Should be looking to increase its level of capital expenditure by around 50%
• Should seek to improve its operating expenditure efficiency by 4.5% a year in real terms
• Will need to strengthen its analytical and information management function

“Watercare is a critical part of Auckland’s future as a world class city, and this review is timely as we end our first ten years as a CCO and consider how best to serve our customers going forward,” Mr Bridge said.

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